For home daycare is percentage of time business conducted in home office 100%

[Lavita]

"percentage of time of business conducted in home office", i run a daycare in my home, this question is asked after you figure the time space %, 

this is my only place of business. i have rooms that are partially used and exclusively used. my time space is 40.82.  is the answer to this question 100%, or % of business in exclusive rooms ( how do you figure this), or the time space %?

[MaryK1 · Accepted solution]

Special rules apply if you qualify for home office deductions under the day care exception to the exclusive-use test. Your business-use percentage must be discounted because the space is available for personal use part of the time. To do that, you compare the number of hours the day care business is operated, including preparation and cleanup time, to the total number of hours in the year (8,760).

Assume you use 40% of your house for a day care business that operates 12 hours a day, five days a week for 50 weeks of the year. That’s 3,000 hours out of the total of 8,760 hours in the year. That’s 34% of the available hours, so your business write-off percentage is 13.6% (40% of 34%).

[phongngo-t]

The answer to this question would not be 100% as you don't spend 100% of your time in your "office" working.  By working, that would entail the hours in which you're caring for children.  And if children are not present, then you may consider the time of activities that are business related, such as updating meal menus, answering emails, running invoices, etc.

As such, calculate the denominator which is the total amount of time AVAILABLE for you to work which would normally be the entire year (24 hrs/day x 365 days) or if you started the daycare after Jan 1, 2017 then you would base it on that number of days.

As for the numerator, it would be the accumulate number of hours per year that you spend caring for children and performing business related tasks when children aren't present.

Example:

My wife cared for children + performed administrative tasks for 3134 hours of the year and started the business on Jan 23, 2017 so there was only 8208 hours available for work in the tax year.  Her time % is 38.18%.